Microsoft and Adobe meet to discuss Apple, possible merger

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Microsoft CEO Steve Ballmer met for an hour recently with Adobe CEO Shantanu Narayen, and Apple was a big part of the agenda. Neither company wants to comment on the meeting, and neither denied it occurred, but of course no large corporation ever comments on rumors or speculation.

Ballmer showed up with a small entourage of deputies at Adobe's corporate offices in San Francisco to hold a secret meeting with Narayen that lasted over an hour. That's according to The New York Times, which cited employees and consultants to the companies who did not want to be identified. There were many topics covered, including Apple and its control of the mobile phone market. Another topic was the way Apple CEO Steve Jobs blocked Flash on the company's handheld devices.

The duo also discussed how they could partner to fight back, and Microsoft acquiring Adobe was reportedly among the options. At roughly $14.5 billion in market capitalization though, Microsoft would likely end up paying anywhere between $15 billion and $20 billion. Microsoft once offered $44.6 billion for Yahoo, so this isn't entirely impossible, but we're very skeptical.

Microsoft has tried acquiring Adobe several years ago, but the potential deal never moved past informal talks as there was fear that the United States Department of Justice would block the deal on antitrust grounds. That was when Microsoft was still the only dominant force in technology; Google and Apple were not the giants they are today.

Adobe and Microsoft collaborate on many fronts. In recent years, however, there has been friction between the two, especially ever since Microsoft released Silverlight to compete with Flash and since Adobe forced Microsoft to remove built-in PDF support in Windows Vista and Office 2007. It appears that Apple is the common foe that is drawing them together. The enemy of my enemy is my friend.


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